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March 18, 2010 Volume 31, No. 24

Gov. Jay Nixon announces plan to rescue state’s 2010-11 budget

Finding savings

Governor rejects tax hike, across-the-board cuts

State tax revenues continue to plunge and are causing major uncertainty as Missouri legislators work on a spending plan for the 2010-11 fiscal year that begins July 1. In a March 11 speech to the Springfield, Mo., business community, Gov. Jay Nixon announced a plan to “right-size state government by cutting programs, trimming the workforce and consolidating departments while maintaining excellence in our services.”

A key element of those consolidations, he said, would be to meld the Department of Elementary and Secondary Education with the Department of Higher Education.

Nixon said that $500 million must be cut from the state budget that he proposed in January. One area he proposed cutting is the portion of the state’s Access Missouri college scholarship program that goes to support students enrolled in private colleges and universities.

“Currently many of our state college scholarship programs — both for merit and for need — provide financial support to students whether they choose to attend public or private colleges,” Nixon said. “In some cases, students at private schools actually get larger scholarships than students at public institutions.

“Missouri has wonderful colleges and universities, both public and private. But in times like these we simply can’t continue to subsidize the choice to attend a private school.”

Two options that he will not consider, Nixon said, are tax increases and across-the-board cuts to state government. “Every state is grappling with this downturn, and 29 states have raised taxes. But one thing is off the table here in the Show-Me State. We will hold the line on taxes.”

Across-the-board cuts may seem appealing, he said. “But that’s simplistic and short-sighted. It wouldn’t solve the problem, and it would hurt the people of Missouri.”  

Nixon said his “right-sizing” plan would consolidate the state’s two education departments into one Department of Education “that prepares students from the day they walk into pre-school to the day they walk across the stage with their college diplomas.”

That consolidation, if approved, would affect the state’s 1.2 million students in kindergarten through graduate school. Robert Stein, Missouri’s commissioner of higher education, says he applauds the governor’s bold steps to address the extraordinary economic challenges facing Missouri.

“Unprecedented problems call for creative, innovative solutions,” Stein said in a statement following Nixon’s speech. “Centralization of administrative functions — such as equipment, vehicles and data gathering — could certainly result in savings. We will use our expertise to bring value to the discussion and explore all options for making the delivery of education to Missouri citizens more efficient.”

Stein said that interest in the concept of aligning pre-school through higher education — the so-called P-20 approach — is growing across the state and nation and deserves consideration by legislators and the public.

He noted that the debate over state-based financial aid being used by students to attend a private school has heated up during the past two legislative sessions, with bills introduced both years to reduce the amount available to students who choose higher-tuition private institutions. Currently, almost 50,000 students receive merit and need-based scholarships financed by the state and administered by the Department of Higher Education.

Stein planned to help facilitate a discussion among public and private institution presidents March 16 regarding how best to provide financial aid to Missouri students. He said as the governor’s proposal moves forward, the Department of Higher Education will provide data to help inform future decisions about student financial aid.